GPSA Weekly Views

In spite of the successes of luring ex-South Africans back to this country, this article came to my attention. You be the judge -

Where have all the smart folks gone?

By: Felicity Duncan

Posted: 2005/01/25 Tue 14:11 | © Moneyweb 1997-2005

Between warm-hearted initiatives like FNB’s Homecoming Revolution and dire warnings from economists about the skills shortage and the brain drain, it’s tough to tell exactly what is going on.

This much is clear, there are a lot of South Africans living overseas: Homecoming Revolution estimates the number of people abroad to be 5-m.

Accurate figures are tricky to come by. Statistics SA (StatsSA) for example, only measures self-declared emigrants – that is people who tell the authorities that they intend to emigrate. This creates the possibility of underreporting; not everyone who emigrates feels the need to share his or her plans with government.

In fact, a 2000 study by academics at the University of Cape Town found that the StatsSA figures underestimated emigration by a factor of 4,5 over the period 1989 to 1992, and a factor of 2,6 for the period 1994 to 1997 – to get the right figures you had to multiply by 4,5 and 2,6 respectively.

Even so, the figures StatsSA does produce are depressing. Overall, in 2003, 16165 people left South Africa (42675 if you use the 2,64 factor as recommended above) and 10578 people immigrated here. But the raw figures mask the nature of the issue. Taking a closer look, in 2003, 4316 South Africans in the “professional, semi-professional and technical occupations” category emigrated. During the same period 499 people in that category immigrated. That leaves us with a net loss of 3817 qualified people, probably underreported.

According to the same set of figures, in 2003, 10540 economically active people left the country, and just 1011 economically active people entered it. That means that we are a net importer of economically inactive people, and an exporter of the economically active. We lost 9500 economically active folks and gained almost 4000 not economically active types. Not a great recipe for a country facing a 40% unemployment rate.

The most recent data StatsSA released were for January 2004; after that the organisation stopped publishing emigration data, sticking to publishing immigration figures alone.

The impact of losing skilled people is extremely negative. Dennis Dykes, senior economist at Nedcor, said, “If it is the case that there is a net loss of skills, it’s very bad for the economy. Productivity is essentially what drives economic growth, and losing skilled people means losing economically productive people.”

Dykes said that skills loss will directly impact on the economic growth rate – the more skills an economy loses the lower its growth rate.

“In fact,” said Dykes, “there is evidence that countries with very flexible immigration policies tend to have a higher growth rate. There is a tendency to think that, in a situation of high unemployment a country should tighten up immigration policy. But the reverse might be true, it might be better to actually open up immigration to stimulate growth.”

Currently, SA’s immigration management is not great.

In its strategic plan, the Department of Home Affairs wrote, “The Department is facing immense challenges in the area of immigration. It needs to expand its presence at our ports of entry. Currently the Department is present at only 57 out of 70 ports of entry around the country. Because of its limited capacity and insufficient resources, the Department is finding it difficult to stem the tide of illegal immigration. In 2002 this had increased to 20842. On average, the Department repatriates 150 000 illegal foreigners per year.” That’s a lot of illegal foreigners.

The rules for allowing immigration are fairly strict. To qualify for entrance, a foreigner must have been offered a job that no South African was qualified for. In other words, only people with skills no South African has qualify; according to the act an applicant must prove “extraordinary skills or qualifications” to get into SA. This precludes a lot of highly skilled people coming into the country.

A limitation like that would have disqualified Richard Branson (with basically no formal education), Bill Gates (varsity dropout) and others like them. It also means that your average GP wouldn’t qualify – not an extraordinary skill or qualification.

Although it’s impossible to quantify the impact of skills migration on the economy, it is an issue that deserves more attention than it gets.

Weekly View
	12 March 2005
In spite of the successes of luring ex-South Africans back to this country, this article came to my attention. You be the judge - Where have all the smart folks gone? By: Felicity Duncan Posted: 2005/01/25 Tue 14:11 \| © Moneyweb 1997-2005 Between warm-hearted initiatives like FNB’s Homecoming Revolution and dire warnings from economists about the skills shortage and the brain drain, it’s tough to tell exactly what is going on. This much is clear, there are a lot of South Africans living overseas: Homecoming Revolution estimates the number of people abroad to be 5-m. Accurate figures are tricky to come by. Statistics SA (StatsSA) for example, only measures self-declared emigrants – that is people who tell the authorities that they intend to emigrate. This creates the possibility of underreporting; not everyone who emigrates feels the need to share his or her plans with government. In fact, a 2000 study by academics at the University of Cape Town found that the StatsSA figures underestimated emigration by a factor of 4,5 over the period 1989 to 1992, and a factor of 2,6 for the period 1994 to 1997 – to get the right figures you had to multiply by 4,5 and 2,6 respectively. Even so, the figures StatsSA does produce are depressing. Overall, in 2003, 16165 people left South Africa (42675 if you use the 2,64 factor as recommended above) and 10578 people immigrated here. But the raw figures mask the nature of the issue. Taking a closer look, in 2003, 4316 South Africans in the “professional, semi-professional and technical occupations” category emigrated. During the same period 499 people in that category immigrated. That leaves us with a net loss of 3817 qualified people, probably underreported. According to the same set of figures, in 2003, 10540 economically active people left the country, and just 1011 economically active people entered it. That means that we are a net importer of economically inactive people, and an exporter of the economically active. We lost 9500 economically active folks and gained almost 4000 not economically active types. Not a great recipe for a country facing a 40% unemployment rate. The most recent data StatsSA released were for January 2004; after that the organisation stopped publishing emigration data, sticking to publishing immigration figures alone. The impact of losing skilled people is extremely negative. Dennis Dykes, senior economist at Nedcor, said, “If it is the case that there is a net loss of skills, it’s very bad for the economy. Productivity is essentially what drives economic growth, and losing skilled people means losing economically productive people.” Dykes said that skills loss will directly impact on the economic growth rate – the more skills an economy loses the lower its growth rate. “In fact,” said Dykes, “there is evidence that countries with very flexible immigration policies tend to have a higher growth rate. There is a tendency to think that, in a situation of high unemployment a country should tighten up immigration policy. But the reverse might be true, it might be better to actually open up immigration to stimulate growth.” Currently, SA’s immigration management is not great. In its strategic plan, the Department of Home Affairs wrote, “The Department is facing immense challenges in the area of immigration. It needs to expand its presence at our ports of entry. Currently the Department is present at only 57 out of 70 ports of entry around the country. Because of its limited capacity and insufficient resources, the Department is finding it difficult to stem the tide of illegal immigration. In 2002 this had increased to 20842. On average, the Department repatriates 150 000 illegal foreigners per year.” That’s a lot of illegal foreigners. The rules for allowing immigration are fairly strict. To qualify for entrance, a foreigner must have been offered a job that no South African was qualified for. In other words, only people with skills no South African has qualify; according to the act an applicant must prove “extraordinary skills or qualifications” to get into SA. This precludes a lot of highly skilled people coming into the country. A limitation like that would have disqualified Richard Branson (with basically no formal education), Bill Gates (varsity dropout) and others like them. It also means that your average GP wouldn’t qualify – not an extraordinary skill or qualification. Although it’s impossible to quantify the impact of skills migration on the economy, it is an issue that deserves more attention than it gets.	Past Views Current Joke Past jokes Gallery Links Current Exchange Rate Daily News Headlines
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